As India enjoys the abundant sun in 2025, solar energy has become the cornerstone of sustainable power access for households, businesses, and the nation’s drive toward energy independence. With government incentives such as the PM Surya Ghar Muft Bijli Yojana, millions of families have already installed rooftop solar systems to lower electricity bills and contribute to climate change mitigation.

However, with multiple options available—on-grid solar systems, off-grid solar systems, and hybrid solar power systems—many homeowners and businesses are unsure which solution is best. Should you rely on the cost-efficiency and simplicity of an on-grid solar power system? Are you attracted to the energy independence and resiliency of an off-grid solar power system? Or would a hybrid solar power system offer the right balance for your needs?

In this guide, Orient Solar, one of India’s trusted solar solution providers, will help break down the three types of solar systems. We’ll explore their differences, list out the pros and cons, highlight who each system is best suited for, discuss available government subsidies and net metering benefits, and provide approximate costs for 1 kW to 10 kW rooftop systems across India.

By the end of this article, you’ll have a clear understanding of which rooftop solar system suits your lifestyle, because in 2025, going solar is not just smart—it’s a necessity.

What is an On-Grid Solar Power System?

An on-grid solar power system is the simplest and most commonly used system among homeowners in cities across India. Such a system is strictly connected to the local utility grid, and can easily connect to your existing household power system. Simply put, it’s a partnership between solar panels on your rooftop and your local power company.

How an on grid solar power system works: 

The solar panels on your roof absorb energy from the sun and convert that energy into direct current (DC) electricity. An inverter then changes this energy from DC to alternating current (AC) to be used by your household appliances. During daylight hours, the system first supplies your home power needs. Any excess energy generated by your system that your home does not use flows into the grid using a net metering system, which tracks the excess energy generated by your system that is fed into the grid to credit your account with the utility. At night or any time when the amount of electricity being produced by your solar system is not enough to meet the power usage demands of your house, you will still draw from the grid as you normally do. The ease with which the on-grid solar system runs is because it does NOT require batteries as part of the system.

On-grid solar systems are also well-suited in locations where the electrical utility and the power supply from the grid is very reliable; thus, on-grid is the most common option for city residents making the investment to install rooftop solar systems.

Advantages of On-Grid Solar Power System:

• Economical installation: The cost of a solar power system is generally 30-50% less than other systems, not needing batteries.
• Net metering option: An on-grid solar power system includes the ability to sell extra power back to the grid, often allowing for a monthly reduction of 80-100% in your bill if you have good sunshine.
• Low maintenance: The fewer parts you have, the fewer problems you have, and you do not need to clean the panels often, they can last 25 years or more.
• Ease of scaling needs: You can simply add more solar panels to your system if needed.

Disadvantages of On-Grid Solar Power System:

• Outage: Your system does not work if the grid goes down, unless you add a manual transfer switch.
• Investment in the grid: The policy of net metering may change, pushing your savings down the line.
• No energy storage: On cloudy days you may wish you had storage, as grid-connected power is not available.

For users who value reliability, an on grid can be cost-effective, often recouping nearly all of your investment inside four to six years.

What is an Off-Grid Solar Power System?

An off grid solar power system is a stand-alone system. It is not connected to the utility grid. It is useful in remote villages or off grid homes, where it is not feasible to bring in the grid.

How an off grid solar power system works: 

Just like the on-grid version, solar panels produce direct current (DC) electrical power. The charge controller prevents over-charge to the batteries. An inverter converts DC to alternating to be usable. The primary benefit is to allow for storage of excess energy for back-up, and to use;

In the daytime, when solar panels are producing excess energy to the load, you must charge battery storage, deep cycle batteries, lithium-ion batteries or lead acid batteries. Then you use the stored energy at night. If you are using excess energy when solar energy is the source and load is exceeding the DC output of your batteries, surplus energy from a generator might be utilized.

A solar power system operates independently of the grid and produces surplus electricity, providing continuous electricity, without monthly fees.

Advantages of On-Grid Solar Power System:

• Full Independence: No grid tie, no bills and no blackouts—ideal for rural empowerment.
• Reliable in Emergencies: Batteries provide 24/7 power support through monsoon season, and beyond.
• Sustainable Off the Grid: Reduces reliance on fossil fuels in remote locations.
• Customization Potential: You can size the battery appropriately for your exact loads: lights, pumps, etc.

Disadvantages of On-Grid Solar Power System:

• Expense of Initial Purchase, Expense of Replacement: Batteries are going to add 40-60%, and; voila, only to replace them every 5-10 years.
• Space and Sizing Issues: Will want the unit to be oversize because of really low usage in winter or high risk of systems running empty; ventilation for batteries is also necessary.
• Maintenance Caring: You need to check on batteries and battery controllers regularly, or they might fail.
• Challenges of an Expansion: You may need to almost start from scratch, depending on how your originally sized system.

What is a Hybrid Solar Power System?

A hybrid solar power system combines the advantages of being connected to a grid and having battery storage for backup. This system is considered the "smart" option for modern homes that are concerned about blackouts but want the benefits of solar energy.

How does a hybrid solar power system work? 

A hybrid solar energy system is similar to an on grid solar power system; it still connects with the utility and you will be receiving a bill based on net metering with subsidy benefits. It includes batteries and a "smart inverter" which prioritizes solar energy as the first source of energy; then battery reserves, then only the grid. It can also operate in "island-mode" during an outage: meaning that the hybrid solar system would be isolated from the grid to power your home through backup stored energy. Some models even have the capability to charge the batteries from the grid during "off-peak" hours.

Hybrid solar power systems are therefore a versatile option to add to your rooftop solar system for current or future energy needs.

Advantages of Hybrid Solar Power System:

• Backup Power: Automatically switches to batteries during a blackout, which can provide power to essential circuits for hours or days.
• Future-Proof: You'll start on-grid and will be able to add storage on the market as the subsidy landscape changes.
• Optimized Efficiency: Smart inverters maximize the amount of solar you use at home and reduce the amount you draw from the grid.
• Incentives Galore: The hybrid system usually qualifies for both grid and storage incentives/rebates.

Disadvantages of Hybrid Solar Power System:

• Premium Pricing: Expect to pay 50% to 100% more than a standard on-grid installation because of the batteries and added technology.
• Complexity: The increased number of components means there is more potential for glitching/technical issues, and it is absolutely necessary that you have it professionally installed.
• Battery Lifetime: The batteries will eventually require replacement (although lithium battery options last longer -- 10-15 years).
• Overkill for Stable Grids: If you rarely lose power, you are paying for features you will probably never use.
   

Who Should Choose Which System?

• Key Decision Factors:

1. The choice of either an on grid solar power system, hybrid solar power system or off grid solar power system will depend on location, reliability of the grid supply, affordability, typical usage of daily energy, and sustainability aspirations.
2. Government schemes such as PM Surya Ghar Muft Bijli Yojana in 2025 make these evident decision factors increasingly important for the choice of rooftop solar.

• On-Grid Solar Power System:

1. Best suited for urban dwellers living in cities such as Mumbai or Delhi with a reliable grid supply.
2. They are poised to benefit from modernization of the grid such as World Bank funded upgrades in Delhi incentivizing integration of clean energy.
3. Reliability of supply will mean very few outages, and you can save easily through net metering; those savings will reduce your bill by anywhere from 50-80% of your total usage. 
4. This option is ideal if you are a cost sensitive consumer, seeking the most simple option with a returns of investment of 4-6 years without battery expenses and relies upon reliability to get all savings.
5. All of this makes on grid options best suited for residences in neighborhoods with a reliable infrastructure and availability of net metering in full.

• Hybrid Solar Power System:

1. Perfect for areas with regular load-shedding, such as Bihar or Uttar Pradesh, and a high grid loss rate (16.5% nationwide in 2025).
2. Managed peak demand disruptions, when demand hit a record high 249,856 MW in May 2024.
3. And with battery backup, even in the event of a power outage, you can still access electricity by running critical appliances, from lights to refrigerators, for hours or days.
4. Perfect for middle-class families or small businesses that need reliable power.
5. Ideal in places where partial net metering exists as well as high grid interruptions on a recurrent basis to find an even balance of reliability and economy of scale.

• Off-Grid Solar Power System:

1. Typically a lifeline for remote areas, such significant examples like farms in Rajasthan or hills in the Northeast that have no grid connection.
2. Addressing challenges when solar is curtailed, or of internalizing solar facilities within the fossil-fuel generation model during low-demand opportunities.
3. If your goal is around energy autonomy, an off-grid solar system has more to offer because of the high conformity to an energy stack model that includes panels, batteries, and optional generators for sustained access without interruption.
4. Typically suitable for eco-conscious individuals or communities that want to be self-sufficient.
5. Ideal where a high upfront cost can pay back over time zero utility bills, at least in-season anyway.

• General Considerations for Rooftop Solar Systems:

1. Evaluate the reliability of the grid by checking your local DISCOM reports (e.g., outage rates).
2. Estimate the Daily Usage: A family of four's daily use is generally 5-10 units of electricity, depending on what's considered "usage" (if a business, usually more).
3. Check the Roof Area: You need about 100 sq ft of roof area per 1kW of any rooftop solar system.
4. Businesses tend to want a hybrid solar power system to ensure continuity of operations.
5. Eco-villages or off-grid communities tend to be interested in off grid solar power systems to maintain their independence.

Government Subsidy (CFA) on Solar Systems in India (2025)

The Ministry of New and Renewable Energy (MNRE) provides Central Financial Assistance (CFA) to make rooftop solar affordable for households. As of 2025, the PM Surya Ghar: Muft Bijli Yojana is the flagship programme.

 Important: Subsidy applies mainly to On-Grid residential rooftop systems. Hybrid systems (with batteries) may get subsidy only on the solar panel + inverter portion (not on batteries), depending on state/DISCOM rules.

Subsidy Rates (Residential Rooftop, 2025)

*Special category states = North Eastern states, J&K, Ladakh, Himachal Pradesh, Uttarakhand, Sikkim, Andaman & Nicobar, Lakshadweep.

 Example Subsidy Calculations

Hybrid systems (with batteries) cost 1.5–2.5× more. Subsidy is only for the rooftop solar portion (panels + inverter). Example: a 5 kW hybrid system (~₹4.5–6.5 lakh) may still get only ₹78,000 subsidy.

 Key Conditions for Subsidy

• Must be installed by empanelled vendors via the National Rooftop Portal.
   
• Modules must be DCR (domestic content requirement) certified and listed by MNRE.
   
• Subsidy applies to residential consumers only (not commercial/industrial).
   
• Subsidy is credited directly to your bank account after inspection & net-metering approval.
   

Takeaway:

• On-grid rooftop solar is the biggest subsidy winner — effective costs drop 35–50% for small systems.
   
• Hybrid solar gets limited benefit (panels only, no battery subsidy).
   
• Off-grid systems are generally not subsidised under rooftop CFA, unless under separate rural electrification projects.
   

Conclusion: The Right Solar System for Your Home

So, which is better—an on grid solar power system, off grid solar power system, or hybrid solar power system? It boils down to your reality. For cost-conscious city slickers, on-grid wins with subsidies turbocharging rooftop solar systems. Power-paranoid households? Hybrid's your hedge. True trailblazers off the grid? Off-grid delivers freedom, albeit pricier.

In 2025 India, solar isn't a luxury—it's a launchpad for net-zero living. With falling costs and robust incentives, now's the time to solarize. Consult a certified installer, crunch your kWh needs, and let the sun power your future. The grid (or lack thereof) awaits.